TDC expects to get waivers for put option under 3¾%, 5 5/8% notes

By Susanna Moon

Chicago, May 30 – TDC A/S said it expects secure the needed consents to amend its €500 million 3¾% notes due March 2, 2022 and its £550 million 5 5/8% notes due Feb. 23, 2023 in connection with the acquisition by DK Telekommunikation ApS.

The issuer expects the meetings to meet quorum and for the amendments to be approved based on the early results as of 11 a.m. ET on May 28, according to a company update on Wednesday.

No further details were offered in the release.

Holders may continue to send electronic voting instructions until 11 a.m. ET on June 1.

The meetings will be held on June 6 in London.

As announced May 15, TDC is asking holders to consent to waive change-of-control put option rights that occurred on May 4 when DK Telekomm acquired shares representing more than 90% of the total share capital and all voting rights of the issuer.

The same day, DK announced its plans to squeeze out the remaining 9% of the issuer's share capital held by minority shareholders by early June and then afterward to establish a permanent capital structure.

The capital structure following the squeeze-out is expected to be as follows:

• Existing unsecured notes of the issuer or up to a €1 billion backstop facility at the level of the issuer;

• €3.9 billion term loan B with indicative maturity of seven years at the level of the issuer;

• €1.4 billion capital market issuances at the level of an intermediate holding company named DKT Finance ApS;

• Unfunded ancillary facilities (revolving credit facility and capex facility) amounting to €600 million; and

• €2.7 billion of equity.

As security for the issuer's obligations under the term loan and the facilities, the issuer will grant security over the shares in each of the material companies that it owns, its material bank accounts and material intra-group receivables.

Interest on each series of notes covered by the solicitation will step up by 125 basis points following a step-up event, the release noted.

The notes for each series have been downgraded since May 4 to junk from Moody's Investors Service, S&P Global Ratings and Fitch Ratings to B1, B+ and BB- from Baa3, BBB- and BBB-, respectively.

The downgrades were the result of a change of control, according to the company announcement.

As a result of the change of control and the ratings downgrade, the notes are putable for 45 days after the date of the put event. which will be June 23, with settlement of the redemption occurring on July 2.

The early participation fee will be 0.20% for holders who send electronic voting instructions in favor of the extraordinary resolution by the early instruction deadline of 11 a.m. ET on May 28.

Noteholders who submit electronic voting instructions after the early deadline will not receive the fee.

To receive the early participation fee, holders who submit electronic voting instructions in favor of the measure before the early deadline must not attend or be represented at the meeting.

Noteholders who wish to exercise the put option for each series will need to submit separate electronic instructions before the end of the put period on June 23. Holders who exercise the put option may still participate in the consent solicitations and submit an electronic voting instruction, the company noted.

As announced May 23, noteholders were able to revoke their instructions until noon ET on May 25 due to Fitch Ratings’ May 22 downgrade of the company’s senior unsecured debt to B+(EXP) from BB-(EXP).

The solicitation agent is Nordea Bank AB (publ) (+45 61 61 29 96 or NordeaLiabilityManagement@nordea.com). The tabulation agent is Lucid Issuer Services Ltd. (+44 20 7704 0880 or tdc@lucid-is.com).

TDC is a Copenhagen-based provider of communications and entertainment solutions in Denmark.

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